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Policy Research Bulletin
January-March 1999
Volume 10, Number 1

Publications and Data

For information on how to order the World Bank publications reviewed in this issue, see page 16.

BOOKS

Fighting Poverty with Microcredit:Experience in Bangladesh

Shahidur R. Khandker
Published by Oxford University Press
Providing the poor with access to financial services is one way to help increase their incomes and productivity. But in many countries traditional financial institutions have failed to do this. Microcredit and cooperative programs fill this gap, providing credit to those who lack access to formal financial institutions.

This book examines the experiences of three microcredit programs-the Grameen Bank, the Bangladesh Rural Advancement Committee, and the Bangladesh Rural Development BoardÕs Rural Development Project-12- to quantify the potential and limitations of such programs as an instrument for delivering financial services to the poor and reducing poverty.

Curbing Corruption: Toward a Model for Building National Integrity

Rick Stapenhurst and Sahr Kpundeh, editors
EDI Development Studies
After years of being treated as a taboo subject, the issue of corruption has begun to attract serious attention from the donor community. This book discusses corruption and its causes and remedies, striking a balance between the theoretical and practical. It focuses on lessons learned, with two examples of good practice (Hong Kong and Singapore); economic and institutional approaches to anticorruption efforts; and case studies of Sierra Leone, Tanzania, and Uganda. Experience suggests that an effective anticorruption strategy is multifaceted, combining economic reforms and institutional strengthening. And political commitment is key.

Resetting Price Controls for Privatized Utilities: A Manual for Regulators

Richard Green and Martin Rodriguez Pardina
EDI Development
Studies As private companies replace government agencies as owners and operators of infrastructure services, governments must develop new skills in economic regulation-to protect consumer interests while ensuring that the private companies remain financially sound and have incentives to operate efficiently. This manual provides new economic regulators with practical guidance.

JOURNAL

The articles summarized below appear in the February issue of the World Bank Research Observer, vol. 14, no. 1.

Judicial Reform and Economic Development: A Survey of the Issues

Richard E. Messick
Acknowledging the importance of sound judicial systems to good governance and economic growth, the World Bank and other organizations have funded judicial reform projects. Yet little is known about how judicial reform affects economic performance or what constitutes a sound reform project. This article surveys current studies on judicial reform and finds some surprising results.

Rethinking the Causes of Deforestation: Lessons from Economic Models

Arild Angelsen and David Kaimowitz
This article, which synthesizes the results of more than 140 economic models analyzing the causes of tropical deforestation, raises doubts about many conventional hypotheses in the debate about deforestation. It also finds that although the boom in deforestation modeling has yielded new insights, weak methodology and poor-quality data make the results of many models questionable.

Appraising Workfare

Martin Ravallion
This article offers simple analytic tools that can be used to rapidly appraise the cost-effectiveness of an existing workfare program as a basis for deciding whether to expand it. It analyzes two stylized versions of a range of programs found in practice: one for a middle-income country, the other for a low-income country.

The Evolution of Poverty and Inequality in Indian Villages

Rajshri Jayaraman and Peter Lanjouw
This article examines the evolution of poverty and inequality in rural India by reviewing longitudinal village studies. Although most village studies support the survey-based judgment that rural poverty declined in India during the 1970s and 1980s, they find that progress has been slow and irregular and that inequalities within villages have persisted.

The Costs and Benefits of Regulation: Implications for Developing Countries

J. Luis Guasch and Robert W. Hahn
The literature on the benefits and costs of regulation shows that regulation aimed at controlling prices and entry into markets that would otherwise be workably competitive is likely to reduce growth. Process regulation can also impose significant economic costs. But social regulations may have significant net benefits for the average consumer if designed judiciously.

Formal and Informal Markets for Water: Institutions, Performance, and Constraints

K. William Easter, Mark W. Rosegrant, and Ariel Dinar
Water markets-formal or informal-can be an efficient method for reallocating scarce water supplies. At the same time certain constraints can raise the transaction costs of trading water. This article reviews the conditions necessary to establish successful water markets, identifies potential problems, and offers mitigating strategies.

Public Social Spending in Africa: Do the Poor Benefit?

Florencia Castro-Leal, Julia Dayton, Lionel Demery, and Kalpana Mehra
This article examines the effectiveness of public spending on education and health care in several African countries and finds that it favors not the poor but the better-off. The solution is not simply to adjust the subsidy program. The constraints that prevent the poor from taking advantage of these services must also be addressed.

DISCUSSION, TECHNICAL, AND RELATED PAPERS

Health, Nutrition, and Population Indicators: A Statistical Handbook

Eduard Bos, Vivian Hon, Akiko Maeda, Gnanaraj Chellaraj, and Alexander Preker
Health, Nutrition, and Population Series To monitor and evaluate progress toward improving health in developing countries, the World Bank and borrower countries need a method for measuring the outcomes as well as the performance of health and health finance systems. This report provides a comparative perspective on country performance and points out future challenges in the health sector. It presents the latest indicators of levels and trends in health status, health determinants, health systems, and health finance, and explains and analyzes trends.

Gender, Growth, and Poverty Reduction: Special Program of Assistance for Africa, 1998 Status Report on Poverty

C. Mark Blackden and Chitra Bhanu Technical Paper 428
This report makes a convincing case that reducing gender inequality would increase growth, efficiency, and welfare in Africa. It documents the structural role of men and women in African economies and examines the links between the market and the household. The report makes key recommendations for public policy intervention in the areas of participation, investment in human capital and in the household economy, support for rural livelihood strategies, and increased focus on gender in statistics and poverty monitoring.

POLICY RESEARCH WORKING PAPERS

Working Papers disseminate the findings of work in progress and encourage the exchange of ideas among Bank staff and all others interested in development issues. Working Papers can be downloaded from the Website www.worldbank.org/html/dec/Publications/Workpapers/home.html or requested from the contact person indicated at the Bank's main address.

Political Economy and Political Risks of Institutional Reform in the Water Sector
Ariel Dinar, Trichur K. Balakrishnan, and Joseph Wambia
WPS 1987 * Contact Fulvia Toppin, room S8-220, fax 202-522-1142.

The Informal Sector, Firm Dynamics, and Institutional Participation
Alec R. Levenson and William F. Maloney
WPS 1988 * Contact Tania Gomez, room I8-102, fax 202-522-2119.

Contingent Government Liabilities: A Hidden Risk for Fiscal Stability
Hana Polackova
WPS 1989 * Contact Alison Panton, room H11-033, fax 202-477-1440.

The East Asia Crisis and Corporate Finances: The Untold Micro Story
Michael Pomerleano
WPS 1990 * Contact Noemi Dacanay, room F6P-198, fax 202-974-4802.

Reducing Air Pollution from Urban Passenger Transport: A Framework for Policy Analysis
Mark Heil and Sheoli Pargal
WPS 1991 * Contact Roula Yazigi, room MC2-635, fax 202-522-3230.

The Present Outlook for Trade Negotiations in the World Trade Organization
John Croome
WPS 1992 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

Financial Safety Nets and Incentive Structures in Latin America
Philip L. Brock
WPS 1993 * Contact Kari Labrie, room MC3-456, fax 202-522-1155.

Estimating Wealth Effects without Expenditure DataÑor Tears: With an Application to Educational Enrollments in States of India
Deon Filmer and Lant Pritchett
WPS 1994 * Contact Sheila Fallon, room MC3-638, fax 202-522-1153.

What Macroeconomic Policies Are "Sound?"
Mansoor Dailami and Nadeem ul Haque
WPS 1995 * Contact Bill Nedrow, room G2-072, fax 202-334-8350.

Namibia's Social Safety Net: Issues and Options for Reform
Kalinidhi Subbarao
WPS 1996 * Contact Precy Lizarondo, room MC4-568, fax 202-522-3283.

On Measuring Literacy
Kaushik Basu and James E. Foster
WPS 1997 * Contact Michelle Mason, room MC4-338, fax 202-522-1158.

The Structure and Determinants of Inequality and Poverty Reduction in Ghana, 1988-92
Sudharshan Canagarajah, Dipak Mazumdar, and Xiao Ye
WPS 1998 * Contact Ari Garscadden, room J2-269, fax 202-473-7913.

Heterogeneity among Mexico's Micro-Enterprises: An Application of Factor and Cluster Analysis
Wendy V. Cunningham and William F. Maloney
WPS 1999 * Contact Tania Gomez, room I8-102, fax 202-522-2119.

GATT Experience with Safeguards: Making Economic and Political Sense of the Possibilities That the GATT Allows to Restrict Imports
J. Michael Finger
WPS 2000 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

Measuring the Dynamic Gains from Trade
Romain Wacziarg
WPS 2001 * Contact Sarah Crow, room MC4-706, fax 202-522-2578.

Accounting for Toxicity Risks in Pollution Control: Does It Matter?
Susmita Dasgupta, Beno”t Laplante, and Craig Meisner
WPS 2002 * Contact Yasmin D'Souza, room MC2-622, fax 202-522-3230.

Thailand's Corporate Financing and Governance Structures
Pedro Alba, Stijn Claessens, and Simeon Djankov
WPS 2003 * Contact Rose Vo, room MC10-628, fax 202-522-2031

What Can Be Expected from African Regional Trade Arrangements? Some Empirical Evidence
Alexander J. Yeats
WPS 2004 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

Fiscal Federalism and Macroeconomic Governance: For Better or For Worse?
Anwar Shah
WPS 2005 * Contact Silvana Valle, room G6-079, fax 202-522-3124.

Household Welfare Measurement and the Pricing of Basic Services
Jesko Hentschel and Peter Lanjouw
WPS 2006 * Contact the PREM Advisory Service, room MC4-501, fax 202-522-1135.

Regional Integration Arrangements: Static Economic Theory, Quantitative Findings, and Policy Guidelines
Dean A. DeRosa
WPS 2007 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

Volatility and Contagion in a Financially Integrated World: Lessons from East Asia's Recent Experience
Pedro Alba, Amar Bhattacharya, Stijn Claessens, Swati Ghosh, and Leonardo Hernandez
WPS 2008 * Contact Debbie Fischer, room MC4-168, fax 202-522-1135.

Poverty and the Economic Transition: How Do Changes in Economies of Scale Affect Poverty Rates for Different Households?
Peter Lanjouw, Branko Milanovic, and Stefano Paternostro
WPS 2009 * Contact Patricia Sader, room MC3-632, fax 202-522-1153.

The Real Impact of Financial Shocks: Evidence from the Republic of Korea
Ilker Domaç and Giovanni Ferri
WPS 2010 * Contact Muriel Greaves, room MC8-150, fax 202- 522-1784.

Measuring Poverty Using Qualitative Perceptions of Welfare
Menno Pradhan and Martin Ravallion
WPS 2011 * Contact Patricia Sader, room MC3-632, fax 202-522-1153.

Export Quotas and Policy Constraints in the Indian Textile and Garment Industries
Sanjay Kathuria and Anjali Bhardwaj
WPS 2012 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

A New Database on Investment and Capital for Agriculture and Manufacturing
Al Crego, Donald Larson, Rita Butzer, and Yair Mundlak
WPS 2013 * Contact Pauline Kokila, room MC3-544, fax 202-522-1150.

Land Institutions and Land Markets
Klaus Deininger and Gershon Feder
WPS 2014 * Contact Maria C. Fernandez, room MC3-542, fax 202-522-1151.

The Mechanics of Progress in Education: Evidence from Cross-Country Data
Alain Mingat and Jee-Peng Tan
WPS 2015 * Contact Anahit Poghosyan, room G8-064, fax 202-522-3233.

Financial Services for the Urban Poor: South Africa's E Plan
Jo Ann Paulson and James McAndrews
WPS 2016 * Contact Ann Thornton, room F6K-258, fax 202-522-3198.

Corporate Growth, Financing, and Risks in the Decade before East Asia's Financial Crisis
Stijn Claessens, Simeon Djankov, and Larry Lang
WPS 2017 * Contact Rose Vo, room MC10-628, fax 202-522-2031.

Prerequisites for a Development-Oriented State in the Democratic Republic of the Congo
Mondonga M. Mokoli and Hans P. Binswanger
WPS 2018 * Contact Hans Binswanger, room J6-157, fax 202-614-0037.

The Effects on Developing Countries of the Kyoto Protocol and Carbon Dioxide Emissions Trading
A. Denny Ellerman, Henry D. Jacoby, and Annelene Decaux
WPS 2019 * Contact Tourya Tourougui, room MC2-521, fax 202-522-3230.

Trade Liberalization, Fiscal Adjustment, and Exchange Rate Policy in India
Delfin S. Go and Pradeep Mitra
WPS 2020 * Contact Cynthia Bernardo, room MC2-501, fax 202-522-1154.

Balance, Accountability, and Responsiveness: Lessons about Decentralization
Anwar Shah
WPS 2021 * Contact Anwar Shah, room G6-079, fax 202-522-3124.

The Implications of Foreign Aid Fungibility for Development Assistance
Shantayanan Devarajan and Vinaya Swaroop
WPS 2022 * Contact Cynthia Bernardo, room MC2-501, fax 202-522-1154.

Capital Inflow Reversals, Banking Stability, and Prudential Regulation in Central and Eastern Europe
Samuel Talley, Marcelo M. Giugale, and Rossana Polastri
WPS 2023 * Contact Michael Geller, room I4-142, fax 202-522-2093.

Re-Engineering Insurance Supervision
Lawrie Savage
WPS 2024 * Contact Hedia Arbi, room F6P-266, fax 202- 522-3199.

Dynamic Capital Mobility, Capital Market Risk, and Exchange Rate Misalignment: Evidence from Seven Asian Countries
Hong G. Min
WPS 2025 * Contact Kari Labrie, room MC3-459, fax 202-522-1155.

Circuit Theory of Finance and the Role of Incentives in Financial Sector Reform
Biagio Bossone
WPS 2026 * Contact Biagio Bossone, room MC10-619, fax 202- 522-2031.

Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards
Kaushik Basu
WPS 2027 * Contact Michelle Mason, room MC4-338, fax 202-522-1158.

Access to Markets and the Benefits of Rural Roads
Hanan G. Jacoby
WPS 2028 * Contact Maria C. Fernandez, room MC3-542, fax 202-522-1151.

Small Manufacturing Plants, Pollution, and Poverty: New Evidence from Brazil and Mexico
Susmita Dasgupta, Robert E. B. Lucas, and David Wheeler
WPS 2029 * Contact Yasmin D'Souza, room MC2-622, fax 202-522-3230.

The Political Economy of Financial Repression in Transition Economies
Cevdet Denizer, Raj M. Desai, and Nikolay Gueorguiev
WPS 2030 * Contact Tseday Hailu, room F3P-198, fax 202-473-8446.

Addressing the Education Puzzle: The Distribution of Education and Economic Reform
Ramón López, Vinod Thomas, and Yan Wang
WPS 2031 * Contact Tanya Shiel, room G4-030, fax 202-676-9810.

Institutional Investors and Securities Markets: Which Comes First?
Dimitri Vittas
WPS 2032 * Contact Agnes Yaptenco, room MC3-446, fax 202-522-1155.

Diversification and Efficiency of Investment by East Asian Corporations
Stijn Claessens, Simeon Djankov, Joseph P. H. Fan, and Harry H. P. Lang
WPS 2033 * Contact Rose Vo, room MC10-628, fax 202-522-2031.

Information, Accounting, and the Regulation of Concessioned Infrastructure Monopolies
Phil Burns and Antonio Estache
WPS 2034 * Contact Gabriela Chenet-Smith, room G2-148, fax 202-334-8350.

Macroeconomic Uncertainty and Private Investment in Developing Countries: An Empirical Investigation
Luis Servén
WPS 2035 * Contact Hazel Vargas, room I8-138, fax 202-522-2119.

Vehicles, Roads, and Road Use: Alternative Empirical Specifications
Gregory Ingram and Zhi Liu
WPS 2036 * Contact Jean Ponchamni, room MC4-383, fax 202-522-0304.

Financial Regulation and Performance: Cross-Country Evidence
James R. Barth, Gerard Caprio Jr., and Ross Levine
WPS 2037 * Contact Agnes Yaptenco, room MC3-446, fax 202-522-1155.

Good Governance and Trade Policy: Are They the Keys to Africa's Global Integration and Growth?
Francis Ng and Alexander Yeats
WPS 2038 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

Reforming Institutions for Service Delivery: A Framework for Development Assistance with an Application to the Health, Nutrition, and Population Portfolio
Navin Girishankar
WPS 2039 * Contact Betty Casely-Hayford, room G6-078, fax 202- 473-8065.

Making Negotiated Land Reform Work: Initial Experience from Brazil, Colombia, and South Africa
Klaus Deininger
WPS 2040 * Contact Maria C. Fernandez, room MC3-542, fax 202-522-1151.

Aid Allocation and Poverty Reduction
Paul Collier and David Dollar
WPS 2041 * Contact Emily Khine, room MC3-347, fax 202-473-7471.

Determinants of Motorization and Road Provision
Gregory K. Ingram and Zhi Liu
WPS 2042 * Contact Jean Ponchamni, room MC4-382, fax 202-522-0304.

Demand for Public Safety
Menno Pradhan and Martin Ravallion
WPS 2043 * Contact Patricia Sader, room MC3-632, fax 202-522-1153.

Trade, Migration, and Welfare: The Impact of Social Capital
Maurice Schiff
WPS 2044 * Contact Lili Tabada, room MC3-333, fax 202-522-1159.

ELECTRONIC INFORMATION AND DATA

Exploring gender issues

There are sharp disparities in status and welfare between women and men–and between girls and boys– in most countries. Girls are less likely than boys to get treatment for common illnesses, and more likely to die at an early age. In general, fewer girls enroll in school, and they drop out earlier. Women work longer hours than men while earning less, own a much smaller share of the world's household assets, and have less access to credit, labor markets, and extension services. And women have much less say in decisions in the household, community, and government.

Research and experience show that development policies and programs that account for such differences can do more to alleviate poverty and reduce inequality. But policy solutions are not always obvious, and ignoring their gender implications can result in unintended negative consequences for women. To improve our understanding of what policies work best, the World Bank is sharing knowledge and experience with other agencies.

GenderNet

A new Website reflects the wide- ranging efforts and resources that the World Bank brings to bear in integrating gender concerns in its programs and projects. GenderNet (www. worldbank.org/gender) provides statistics, useful tools, research results, and practical examples. The site includes a "dialogue space" and links to the gender Websites of other organizations to encourage discussion and the exchange of ideas and experience. An on-line discussion on the gender dimensions of legal issues and their effect on women has just been launched and will contribute to the development of a World Bank approach to gender and law.

The site describes operations– by the Bank and by other agencies–aimed at integrating gender analysis and gender-sensitive components, and highlights promising approaches. It also describes analyses that identify critical gender issues in a country or sector and may propose remedial strategies or demonstrate the returns to investments in the health, education, and economic status of girls and women. And it summarizes World Bank studies that focus on gender or produce findings on gender issues or on the gender impacts of policies and projects.

Two "gender toolkits" provide guidelines for gender analysis and strategies for integrating gender issues in agriculture and water and sanitation projects. Also useful are checklists of gender issues to consider when developing projects and sectoral programs. Gender profiles for selected developing countries and country data on gender gaps in such areas as education, life expectancy, and labor force participation are also included. This information can help identify problems to address in project design.

Gender disparity in South Asia

While gender disparities are pervasive, the worst manifestations are regionally concentrated, a recent World Bank research project has found. That finding suggests that efforts need to focus first on understanding and eliminating the adverse effects of these differences where they are most concentrated.

Analysis of disparities in child mortality, treatment of common childhood illnesses, and educational enrollment found that:

The findings of the research are highlighted on a new Bank Website (www.worldbank.org/research/projects/gender/gensa.htm). The site includes a database on gender disparity in countries of South Asia, in other developing regions, and at the state and provincial level in India and Pakistan. The data are drawn from a collection of household surveys that used very similar survey instruments and methodologies. The database is available in several formats (Word, Excel, Stata).

The full results of the research are reported in Deon Filmer, Elizabeth M. King, and Lant Pritchett, "Gender Disparity in South Asia: Comparison between and within Countries" (Policy Research Working Paper 1867, World Bank, Washington, D.C., 1998). The paper can be downloaded from the Website or requested from Sheila Fallon at the Bank's main address (or by fax at 202-522-1153 or email at sfallon@worldbank.org).

Tracking external debt

Another area in which the World Bank is collaborating with partner organizations is in the dissemination of statistics on external debt. In a recent modest but significant step, four agencies-the Bank for International Settlements, International Monetary Fund, Organisation for Economic Co-operation and Development, and World Bank-are jointly publishing quarterly releases of statistics on external debt for 176 developing and transition economies. The data are for the most recent quarter, where available. The statistics are hosted at www.oecd.org/dac/debt and are also accessible through each agency's Website (go to www.worldbank.org/data/jointdebt.html for the World Bank's access page). The World Bank publishes historical series on external debt in its annual Global Development Finance (see back page for information on ordering the 1999 edition).

Prompted by the demand for more timely external debt data following the East Asian financial crisis, the initiative aims to provide high-frequency data on such key debt indicators as bank loans, debt securities issued abroad, Brady bonds, and multilateral claims. And because of the heightened focus on short-term debt, it gives special emphasis to debt due within a year.

The statistics are mostly from creditor and market sources, but also include data provided by debtor countries. Where available, flow data are provided as well as stock data. Differences between the series in coverage, frequency, and time lag before publication remain, and the data do not yet provide a comprehensive and consistent measure of total external debt in each country. Still, the Website brings together the best international comparative data available on external debt. The coverage, definitions, and limitations are explained in a methodological note.


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